BILL ANALYSIS                                                                                                                                                                                                    



                                                          SB 586
                                                          Page  1

Date of Hearing:   July 14, 1999

                ASSEMBLY COMMITTEE ON EDUCATION 
                      Kerry Mazzoni, Chair
           SB 586 (Costa) - As Amended:  May 28, 1999

 SENATE VOTE  :   40-0
  
SUBJECT  :   School finance.

  SUMMARY  : Provides for equalization of funding rates among the 34  
counties that have per pupil general-purpose revenues that are  
below average.  Specifically,  this bill  :  

1)Revises the statutory instruction for allocation of county  
  office of education "general purpose revenues" to include  
  equalization funding.

2)Requires the Superintendent of Public Instruction to apportion  
  equalization adjustments of county office general-purpose  
  revenues, according to an allocation schedule for equalization  
  adjustments of approximately $27 million. (Approximately 34  
  counties would receive funding under the schedule.)

3)Provides that if insufficient funds are appropriated to fully  
  fund the schedule in any one year, the Superintendent of  
  Public Instruction shall prorate the funds on an equal basis  
  to the counties listed.

  EXISTING LAW  :  Requires county offices of education to serve as  
agents of fiscal oversight and technical assistance to school  
districts.  They also run alternative programs, such as  
community  
schools.

  FISCAL EFFECT  :   Potential cost of $27 million from the General  
Fund (Prop 98) depending on amount appropriated in the annual  
Budget Act.

  COMMENTS  :   

  Background  .  "Equalization" is a term that has traditionally  
been applied to the process of revising school funding formulas  
in order to reduce per pupil funding differences in general aid  
(revenue limit funding). Revenue limit equalization was  








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initiated in response to the Serrano court decisions that  
ordered the reduction of wealth related disparity in general  
funding for school districts of similar size and type.    
Although the last Serrano case was closed in 1986, the state has  
continued from time to time to make equalizing adjustments to  
revenue limits. In 1995 the Legislature provided $5 million in  
equalization funding for county offices of education. 

  Related legislation  .  Last month, the legislature passed AB 907  
(Alquist, Scott, Torlakson, Johnston and Costa) which was one of  
the "Budget Trailer Bills" and contained essentially the same  
provisions as are in this bill.  AB 907 was vetoed by the  
Governor on the basis that  "The bill has technical flaws which  
in the opinion of the Director of the Department of Finance  
would require the Superintendent of Public Instruction to  
allocate $27 million to County Offices of Education in 1999-00.   
The legislative intent of the measure was to provide  
approximately one-third of that amount this year.

I would sign legislation that appropriates sufficient funding to  
assist County Offices of Education in      implementing the  
education reform package the Legislature approved and I signed  
earlier this year. I would ask the author to work with Secretary  
Hart to achieve that goal."

This message implies that the Governor is seeking more than just  
"equalization" financing.  The sponsors of this bill are working  
with the Governor's staff to develop amendments which meet his  
requirements and will report the status of those discussions at  
the committee hearing.

  Previous Legislation  .  Last year, AB 2518 (Poochigian) would  
have equalized county office of education basic revenues, but  
that bill failed passage in the Senate Appropriations Committee.  
 In 1998, the Legislature approved AB 39  (Mazzoni), which, in  
its last version, was very similar to this bill.  The Governor  
vetoed AB 39, due to the funding mechanism identified in the  
bill (Proposition 98 settle up funds). 

  Arguments in support  .  Proponents note that K-12 school  
districts have received several rounds of equalization in recent  
years, while county offices have received none.  Yet disparities  
are far greater among county offices, with variations as much as  
300%, within counties of the same class (size range).  Such  
disparity results in wide variation in the services that county  








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offices are able to provide to school districts.

  Technical amendments  .  If the bill remains just focused on  
equalization, there will need to be technical amendments to the  
bill to make it work correctly as intended.

  REGISTERED SUPPORT / OPPOSITION  :  (as of 7/9/99)

  Support  

County Superintendents of Schools
Los Angeles County Office of Education
Small School Districts' Association
  
Opposition  

None on file.

  Analysis Prepared by  : Hal Geiogue / ED. / (916) 319-2087